thank you. >> president chiu: thank you. supervisor kim, i understand, has introduced a series of amendments that are supported by myself, supervisors cohen and mar. seconded by supervisor mar. why don't we hold that. i know there are other amendments that will also be offered. supervisor chu. >> supervisor chu: i want to thank colleagues for their thoughts and comments. this item came before the budget and finance committee. we voted to send it out but it was a societ vote 3-1. i dissentd i -- dissented. two of the most important reasons were around the issue of opt out and around the issue of the reserves. in terms of the opt out, we know very much that this is a restriction that the state has put upon us with the enabling legislation and because of that we had to structure a program that has opt out provisions. however i thought there was ways potentially to strengthen the program and make sure we're not

inadvertently capturing individuals who did not want to be in the program. the second has to do with the reserve. currently the way the program is structured the rates that are going to be charged to cca consumers does not necessarily cover the cost of reserves. there are a number of reserves in the program -- i think some people think that it's a modest amount of money, that it is money that the city can affront but i think there is a policy choice to have people who choose to have a more expensive program, who choose to be greener, to also pay for the required reserves of the program. as you know, there is about $# million i$7million in the -- an5 million in a program that is currently in place and none is being carried by any of the cca customers. from my point of view i think there is nothing absolutely wrong about having a cca program but i think it could have been strengthened with stronger opt out provisions as well as ability to recover some of these

reserve expenses through the program. so those are the reasons why i dissented in committee committee. i am offering amendments to the items before us to try to get closer to those components that i'm most concerned with. unfortunately i have to apologize to the sponsor and of course the department. we were not able to circulate the amendments early enough to really get a thorough conversation so i apologize for that. i know sometimes here happen on the fly. so just wanting to re -- the conversation or some of the amendments and then to have i'm sure a very robust conversation about it. the amendment or the motion that i would be making is to add to page 5 the wording further resolve the initial phases of clean power sf will offer service only to those customers who have indicated desire to be included in the initial marketing of the program. i should mention that these are amendments that i'm making in conjunction with supervisor farrell here. the second would be another whereas clause, added to page

16, and these should be in front of you as well, whereas the sf puc have not commit to buy power from shell unless the commission determines that a quantity of customers sufficient to ensure the financial viability of the program has indicated desire to be included in the initial marketing of the program. finally, to the ordinance, section 3, and the resolution, page 9, the sf puc will include in the clean power sf rates a component to begin recoveringy reserves required in the program in the contract period so customers of clean power sf will bear the cost of the program. again, in that phase in terms of the recovery of the reserves there is not an indication of the level but it is sending a message we would like the program to become sufficient over time. those are motions i'd like to make. i want to thank the puc staff and ed harrington. they've done a great job of shepherding a program through that they thought they could bring to the board and we simply

have a few amendments and changes we'd like to suggest. thank you. >> clerk calvillo: to supervisor chu, the clerk's office does not have a copy of those amendments. hopefully your staff is bringing them to us. >> supervisor kim: we will do that. >> president chiu: is there a second in seconded by supervisor farrell. and i wanted to ask, mr. harrington, have you had a chance to see these amendments? i think many of our colleagues would like to get your sense of a feedback on the various amendments, if you've had a chance. >> i received them a few minutes ago and had a chance to look quickly at them if you'd like a quick response. >> president chiu: yes. >> with regard to the one that says the clean power ratepayers will begin recovering the reserves required for the program since there is no specific requirement for how much that would be i think as we look at the raitsd w rates we ha chance to say let's see how far we can get in the four years. that makes sense so we can do

it. the other one does cause quite a bit more heartburn. it sounds like what we're asking to do is start a program with opting in, hoping for the best, not knowing whether it's going to work. i don't know how i keep a contract with shell not knowing how much power they're going to provide. it has a lot of issues that i don't know how it actually works, is the concern there. but maybe as the discussion happens it might be clearer, but i don't get it right now. >> president chiu: thank you. supervisor mar. >> supervisor mar: thank you. and just looking at the -- to my colleague, supervisor chu and farrell, it looks like the amendments would be harmful to the success of the program, from what i could see. i just wanted to first thank supervisor campos for bringing this forward after years of work by assemblyman tom ammiano and many others. i also wanted to thank the sierra club, many leaders from the sierra club over many years, kind of pushing and advocating and advising on this, besides

our great puc staff, and our lafco staff, nancy miller, and jason greed a freid as well. i've been listening to the senior organizations, low income people groups and community based organizations input, as well as the electrical workers. we've been communicated to by hunter stern and ibiew on a number of issues. as a father, i want to see a clean air future, clean greener future for my daughter and the future generation. and melanie nutter, head of the department of the environment is here, that we have tremendously ambitious climate action plan goals. and as ed harrington said a moment ago, this will help us at least make a dent on kind of the huge challenge before us, to clean our air, and to make a clean energy future for all san franciscans. that's why i -- that's why, as a member of lafco over the years,

since 2009, i've been strongly supportive of coming up with the best possible contract in plan. i wish we had more contractors that put in for this but as ed harrington said we're doing our best with what we have and it should be a good step forward for a cleaner future for san francisco. like supervisor kim and others, i want to make sure that our lowest income populations are protected and i strongly support the most aggressive education and outreach program we can have towards especially our lowest income populations, especially language minority groups, so that it's not just the two notices before and two notices after, but everything from, as you said, social media to door-to-door, and even grassroots organizing by the community based organizations as much as we can do. i think mr. harrington mentioned it was 1.2 million through the puc's work but i think really targeted work with a lot of partnerships with community

based groups is really critical. whether it's through lafco and puc and many of our community based organizations, i also appreciate kind of from president chiu and others leadership efforts to try to make sure that we are supporting the -- with $2 million, kind of the more low income populations to get energy efficiency improvements and go solar funding for their homes and housing and also making sure that this new hardship fund really is well done, and there's strong outreach and awareness about it. i also wanted to say, too, that my intent -- i'm supportive of clean power sf but i also want to make sure we're looking at other efforts to meet our action goals. ibew raises other alternatives and i was going to ask mr. harrington to comment, something called california's community solar program and they also point to how public agencies in san mateo and other

countries ar -- counties, we wat local jobs here and to build it up so we have more jobs that are green jobs that we're creating as well. this is a step forward divardz that. but if you could respond to what ibew is saying that would be helpful. >> supervisor, we would supportny program to create and generate green power wherever it might be. when we say local we are not just saying in san francisco. obviously we have watersheds in san mateo and santa clara that are useful for solar panels and we will be happy to partner with whatever groups of people that want to create jobs in the local economy of the bay area and be able to build those kind of projects. >> supervisor mar: again, thank you for putting the best possible contract together. i know we were sitting down together over the past couple of years as this moved forward so i know a lot of thought with supervisor campos' leadership has gone forward but without your leadership i don't think we

would be here today so thank you, mr. harrington. >> president chiu: supervisor olague. >> supervisor olague: i'm really happy to be supporting this legislation. i also will be supporting the amendments of supervisor kim, that relates to the needs of low income communities, although i believe that when a lot of these communities, seniors, and others, are informed about the benefits of this legislation, i think that many would be willing to pay that little extra because of the implications that are so great. i first started -- was first introduced to this issue actually in the late 70's when i read a book by airy lefns called soft energy pass. it's amazing to think 30 years later we're barely making the first step in san francisco. so it's impossible again not to thank supervisors ammiano and mirkarimi for really leading the charge and remaining patient during these years, because it

obviously -- many of the campaigns -- i don't know if many people were involved in them but i think most of us -- some of us here were. and they were really controversial and it was quite a fight to get to where we are now. so, again, i want to thank the leadership at the puc, mr. harrington, -- fox, and ms. ellis who came by and certainly informed me of this. also, the advocates like eric brooks, green party folks, and others, for staying with this, for this period of time. so although the u.s. never ratified the -- protocol i think it's responsible for us to at least locally to start talking about reaching the goals of reducing greenhouse gas emissions. so i think it's a conversation that's long overdue. i hate to be corny but there's

that bumper sticker, act locally, think globally. i might have it reversed. so anyway i'm really happy to be here today to support this. >> president chiu: supervisor farrell. >> supervisor farrell: thank you, president chiu. and, colleagues, and also want to echo support and thanks to ed harrington. i think he's done an amazing job. i know we will talk about you later but done an amazing job at the puc. you know, when i first heard of cca a number of years ago before being on the board of supervisors, and the notion of creating greener, cheaper energy, that also creates local jobs, you know, who wouldn't support that idea. and i believe, as much as anyone in building our green economy here in san francisco, and doing what we can to make that a reality. and, you know, as i mentioned to

mr. harrington, have expressed to him, i realize the constaint he's been under and puc has been under through state law and otherwise in what they can create. as was talked about in committee last week, the initial goals of the board of supervisors passed a number of years ago before cca were simply unattainable. i want to echo comments that i support the -- of cca but there are a number of issues that i have with the current form of the proposal. i think first and foremost is what came out of and is mandated by state law being an opt out type of program. i think it is the wrong way to legislate, to cause it to be an opt out program. it smells of coercion. to me, if this was a voluntary program, or we could create a mechanism where we knew that the people that were being offered cca and that were being asked to increase their energy rates had at least indicated that they wanted to do so, that to me is a

big deal. second of all, we talk about the economic impact, a loss of jobs here in san francisco, reduction of the hetch hetchy fund balance which would result in general fund implications. but as also as supervisor chu mentioned, having a reserves that are not borne by the cca ratepayers but instead are borne by the entire ratepayer base for the puc, which is why i'm going to obviously supporting those amendments. for me, colleagues, i think at the end of the day it really comes down to the consumer. if we can make this a way, i don't think it is the right thing to do to hoist on consumers an increase of 20, 30% higher energy rates, and really an opt out program. we can have debate whether we think that's a decision people make but if we're excluding low income folks we talked about

sros and seniors there will be people vulnerable who will be paying higher rates unbeknownst to them. this has come out in the spam e-mails we've gotten from different agencies, the notion of creating local green energy. this is something i absolutely support as well but the premise and the numbers just don't add up right now. we are increasing energy rates by between 20 and 30% right now, to create what is a break-even program here in san francisco. and that's fine. but i sat down with -- who runs our public finance program yesterday to understand what is our capability in san francisco for puc to bond against in order to raise enough money in order to build out and create local green energy. and the answers were we're going to have to increase the rates substantially over the 20 to 30% that we do now in order to create that. i know there's been talk about it's a fait accompli if we approve this program and we will

build local green energy but that is not the case. mr. harrington and i talked about it last week in the committee meetings. there are no numbers. it's an unknown right now but it is known you have to increase rates higher than what it is today and that's what we need to take into consideration. it's misleading at best to say this program today will create local green energy because that is not the cause. in any case for me the biggest issue has been this opt out nature of this program. we've been talking with our city attorney over the last week. i do wish we had more time to iron this out but it is what it is. and i know there's momentum to make a decision here today. but to create a program where we know there is some voluntary nature of people subscribing to this where they will -- it is not an opt in program, we can't avoid the opt out nature of this but where we have a much better idea where folks want to participate in this program this is why i've added the

resolution -- amendment to the resolution, that supervisor chu alluded to earlier, adding to page 5 a resolution that will make this motion, adding to page 5 the initial phases of clean power sf will -- to those customers with desire to be included in the initial marketing of the program and added to page 16 puc shall not commit to buy power from shell unless customers to ensure the viability of the program as decided by the puc commission have indicated desire to be included in the initial marketing of the program. that to me, colleagues, is something that i think is super important, absolutely does it shift the burden onto the puc to do the marketing, as opposed -- and to get people to voluntarily want to be part of the program as opposed to an opt out. i'd love to have a debate with anyone about an opt out and whether that's a real chie choir

consumers. we debated last year about the yellow pages. that was a big deal for a lot of people. if we provide consumers the initial ability to indicate they want to be part of it i'm for it. if people want to spend more money like supervisor avalos indicated he wanted to do to buy green energy from sf, we should allow people to do that. but to cores the coerce them int program to me is the wrong approach and something i can't support. i will offer those amendments and look forward to discussing it further. >> president chiu: supervisor wiener. >> supervisor elsberndwiener. >> supervisor wiener: thank you. i have questions for the puc and for the city attorney. and i will preface this in terms of the amendments offered and it seems like it's the first two that are at issue, since it looks like the the puc is agreeing to the third.

to me, i think they're very good arguments on both sides of this, and i know that, you know, there are a lot of people who would like to see this voted up or down, either move forward with the program or we don't move forward with the program and after all the years that the agency has put into this program, i certainly think that they're entitled to know whether the program is important or not. what i don't want to do is send them back with something passed, and signed into law, that's going to cause them to sort of spin around chasing their tails and ultimately the program doesn't happen because what we've inserted in is a poison pill. i'm not interested in putting any poison pills in here so i have some questions, i'm trying to ferret out whether particularly the second one -- i guess one and two, are poison pills, and also if there are ways that they don't have to be poison pills. so i guess my first question

is -- we know that state law requires an opt-out. there's now an amendment that requires, in a way, sort of a preliminary or initial opt-in to show a certain level of support before proceeding. i have -- my question is, for whoever can answer it, whether we are able to do that. to have sort of a -- some form of an opt-in that precedes the opt-out. >> deputy city attorney teresa mueller. supervisor, it's absolutely right that state law prohibits an opt-in for this program and requires opt-out. and our view of this requirement

is that it's a requirement for how the program will be marketed and rolled out in the early phases of the program. because the program, that is before you, provides for a phased implementation, this provision simply says, in the beginning phases, the program will be offered to people who have indicated their interest in being included in that initial group to be marketed to. they still would be required to opt out, ultimately, or they would be in the program. and ultimately, the program would have to be offered to every residential customer in san francisco, because that's what state law provides for. >> supervisor wiener: so in terms of the amendment that's before us requiring that a certain quantity, whatever that quantity is, has to show that

they desire to be in the program before the program -- before any commitment to shell is made, is that consistent with the state law? or acceptable under the state law. >> i think it is. we are viewing that as really a condition on the puc's ability to enter the contract with shell. because it provides that, if it there is not a certain base of customers interested in the program, then the program wouldn't go ahead. and it really has nothing to do with the opt-in, opt-out. >> supervisor wiener: okay. so this is an indication of a desire. this is not -- and maybe this is also a question to the chair, to supervisor farrell. is this -- when this language talks about a desire to be included, indicating a desire to be included in the initial marketing of the program, so

it's almost like a survey, as opposed to someone signing on the dotted line, saying i'm in the program. that's how i'm reading this, but i'm curious -- to supervisor chu as well, the authors. >> yes. the construct is to allow the puc -- the commission that approved and created the cca legislation, and the contract that's before us today, allow them -- and the bottom line is after the effective date of this legislation to have them do -- whether you call it survey or outreach, whatever the phrase is, to understand who might be interested in being mcdonald ma. i have confidence going back to my constituents and everyone on this board to say it's the ones who indicated that they wanted to be marketed to that are going to be part of this program and that to me is an important part of a way to look at -- at -- ake law but make this as acceptable from my point of view to rents

as possible. >> supervisor wiener: and so when you combine, again through the chair to the authors of the amendments, when you combine the first two, one is that they have to show that there's sufficient desire, whatever that level is, but number two, once they've done -- let's say they were to do a telephone poll survey, and it reads whatever the threshold is and that's indeterminate here, they would then be locked into marketing the program in the efficiently phase only to those people who have indicated, via the survey, that they're interested? >> supervisor farrell: that's correct. that's the intention. >> supervisor wiener: so i guess my question, to the puc, if there's flexibility for the commission to determine what

that number is -- and i've actually spoken with supervisor farrell about potential language and i have language here to say to get to the number which is viable, which i think is 75,000 or thereabouts, but a number that would give some sort of strong indication that it is likely to be viable, so it could be perhaps a lower number, but something showing that there actually is interest -- i know you've done surveys in the past so i want to acknowledge that. but in terms of logistics of the program, the timing of you sign the contract, you -- at some point you commit to buying the power from shell, you have to have certain -- you don't want to buy it without knowing how many people you're going to be selling it to. i'm wondering what degree of flexibility there is so that if you did do a survey, let's say a certain number of people, whatever the commission determined that that appropriate

number would be, to both do that survey, make that determination, achieve a certain level of interest, and then have that initial phase where you're only doing those folks, and then thereafter, in the next phase you do the broader opt out, which is my understanding of how this would work. and i hope what i said just made sense, but i'm just trying to get a sense from the puc about what is realistic, what's not realistic. i'm not saying what you -- you know, ideally desire because i know there would probably be a desire to opt out because that's much more straightforward and clean cut. so anyway. >> supervisor, i think i understand what you're talking about here. i guess two parts to it. one, as you've noted, we've done extensive surveying already in terms of polling. and so we are only going and looking at places where we think more than the majority of people want to do it in the first place. so we're not just randomly

capturing people in the city, where a majority wouldn't want us. the problem i see with it, as i'm understanding it, is to be able to go out and have people sign up, and i should be able to tell them the price, if i don't know how many people are going to sign up or when, i can't lock in the price 'til i sign the contract with shell. so if i've got to ask them if they want to be in it before i sign the contract i can't tell them what the rate's going to be. it really harms the ability to have an intelligent conversation with people when you're saying don't know what it is, but do you want it. it is much more straightforward to say this is what it is, here's your chances to make a choice, i do understand the uncomfortableness, but we're going to do a good job of marketing. it would make the program difficult to figure out how to accomplish, how you sell

something you don't know what the rate is and you can't do a rate until you do the contract and you can't have a contract until you deliver the power. i don't think it works. >> supervisor wiener: with the currents version where it's a pure opt out because it starts out with a certain pool, you have -- be able to enter into a contract for a specific price with shell. >> right. we do the contract and then start the whole education campaign knowing how much we're going it charge people. >> supervisor wiener: it's not an issue, again through the chair to the authors, if i can maybe just get a response to that because i think that on the surface, this would be an interesting thing to support but again i very much do not want to do something that could end up -- i know it's not the intent to be a poison pill but could end up being a poison pill. so i'd be interested to know the authors response. >> i'll comment first and appreciate mr. harrington's comments. but from my perspective, we're doing just the opposite. we're making assumptions based

upon an opt-out rate from an initial marketing group that we're able to set rates from. so that is a different way of approaching it and putting again the onus on individuals and consumers that we think are going to be the ones paying attention here. and that is exactly the issue that i have with the opt-out program, that we're already opting out low income folks, we're talking about vulnerability of seniors and we talk about people that will be vulnerable not just the average person not paying attention. it's literally running an excel market here. therefore we're going to be able to lock in energy rates. that to me is not an excuse or reason to go with that approach as opposed to saying even if you have to talk longer with folks and say, hey, we're going to come to you first, we want indication would you be interested in this, we'll come back to you with a rate, they can market to those folks. but just because we're not going to have a rate